A common view in the file-sharing debate is that we have two free-market values standing against each other. On the one hand we have free speech and the freedom of information. On the other hand we have property rights, some claim.
It’s not that simple, however. Those of us who really defend property rights must show that we understand what property rights are, why they exist, how they work, what they encompass and what role they play in the the discussion about file sharing.
Property is not a simple concept that we define the same way regardless of the circumstances, but rather an umbrella under which many different legal rights are crowded. Each type of ownership consists of its own set of rights and is associated with certain limitations.
Whether copyright should be considered a part of the property-right family is widely discussed. We will never get a clear answer. Since the question is a semantic one, it is to some degree an arbitrary choice to categorize or not categorize copyright as a type of property right. For the sake of this discussion it doesn’t matter what labels we use.
There are more differences than similarities between conventional property rights and copyright. Property is a convention that has existed so far back in history that we cannot determine it’s origin. Property rights have been adopted out of necessity. We need rules determining who should control a resource that is scarce. Ownership is also a necessary condition for freedom and entrepreneurship since almost all human activity requires the property rights to tools of various sorts.
The basic argument for property rights – the need to divide scarce resources between us – doesn’t apply to copyright and other immaterial rights. The access to an immaterial good is unlimited, as long as politicians don’t limit it with copyright laws. Therefore, economists normally describe copyright as a legislated monopoly. The monopoly, which is limited in time, includes among other things the right to spread and produce copies of an immaterial product. This causes the file-sharing conflict that we need to deal with.
The purpose of creating a monopoly for copyright holders was to increase the incentives for innovation. Whether the monopoly is effective has been questioned by FA Hayek among others. Recent Nobel-Prize recipient Eric Maskin has studied the software-patent legislation introduced in the 1980s and concluded that these laws have not led to an increase in the software industry’s R&D investments. I don’t suggest that immaterial rights such as copyright should be abolished, but we can never take for granted that laws actually work as intended.
Parts of the copyright laws appear to work well and can be enforced with reasonable means, for instance the exclusive rights to commercial use of an immaterial good. Commercial activities are generally carried out in large scale by few agents, and therefore it’s doable to go after those selling copies of a movie without the right holder’s permission. At least within the borders of one’s own country.
On the other hand, copyright laws that ban non-commercial copying and distribution don’t function at all. Unlike property rights, that have arisen through spontaneous order and fit naturally into our belief systems, the copy ban is the result of government planning. Planned economies seldom work well, and the copy ban is no exception. Citizens have always copied information to the extent that they have been able to.
Even if most of us agree that copyright laws should be enforced with reasonable means – as should other laws – that leaves us with the question about what copyright laws should encompass. The boundaries of copyright have been moved many times and it’s far from evident that today’s version is optimal. It would indeed be strange if a copyright regime from the 1960s was functional in our current information society.
At times of technology shifts, conflicts can arise between copyright and the property rights of the physical world. This happened when the video recorder came 30 years ago. Up till then no one questioned the fact that tv broadcasters decided what programs could be seen at what times. With the VCR, viewers could suddenly copy tv shows, taking away the networks’ exclusive right to schedule tv viewing.
Had politicians decided to outlaw the copying of tv shows the networks could have retained their exclusive rights – at least in theory. A VCR ban would however greatly interfere with the citizens’ right to dispose of their own technical equipment. Copyright stood against conventional property rights, resulting in a limitation of the scope of copyright.
We now face a similar choice, but with greater implications. At stake we obviously have parts of the copyright laws. But also at stake we have not only the freedom of information but also significant physical property rights.
